As the law currently stands, employers and pension funds are permitted to exclude civil partners from spousal benefits under a pension scheme the rights to which accrued prior to 5 December 2005, which is when Section 1 of the Civil Partnership Act 2004 (CPA) came into force.

John Walker had worked for the Cheshire-based chemicals group Innospec Limited for more than 20 years until his retirement in 2003. For most of that time he was in a relationship with his partner and the couple entered into a civil partnership in 2006 and subsequently married. It was Mr Walker's expectation that, upon his death, his partner would receive the same benefits under the company's pension scheme as would a surviving spouse had he been married to a woman. Innospec, however, relied on the exemption and refused Mr Walker's civil partner entitlement to a survivor's pension.

By Mr Walker's reckoning, were he to die, his partner would receive a pension of £500 per annum. Were he married to a woman, however, his widow would receive two thirds of his pension.

The Employment Tribunal (ET) found that the operation of the exemption meant that the Innospec pension scheme discriminated against Mr Walker both directly and indirectly. Furthermore, although the scheme complied with domestic legislation, it was in breach of the EU Equal Treatment Directive and EU law. In the ET's view, civil partners should receive benefits based on the deceased's full length of service, not just from the date on which the CPA became law.

Innospec's challenge to that decision was supported by the Secretary of State for Work and Pensions, who instructed counsel in the matter.

The Employment Appeal Tribunal (EAT) upheld the appeal. Whilst it accepted that a pension scheme which paid survivor's benefits to a spouse of the opposite sex but not to a same-sex partner was clearly discriminatory, the EAT found that the effect of the scheme on Mr Walker was nevertheless lawful by virtue of the exemption contained in the Equality Act.

Mr Walker took his case to the Court of Appeal, which found that his entitlement to benefit was part of his pay that was earned incrementally during his years of service. His entitlement to pension was 'definitively established' as he earned it. Throughout that period, the discriminatory treatment of which he complained was lawful and, in the Court's view, the principle of EU law of 'no retroactivity' means that conduct which was lawful when it occurred cannot become unlawful retrospectively.

Furthermore, whilst a national court has a duty, where possible, to interpret a national law so as to conform with a European Directive, that power does not enable a national court to 'trespass into the field of lawmaking which is the task of Parliament and not the courts'. In this case, to do so would be directly contrary to the express legislative intention.

It was not, therefore, unlawful for there to be discrimination in respect of access to a benefit payable in respect of periods of service prior to 5 December 2005.

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